You may recall, back in 2005, that the tech world let out a massive "Huh?
when eBay acquired Skype
for somewhere around $2.6 billion. eBay kept insisting there were synergies there, and lots of people tried to puzzle out what those might be. Calling people to discuss auctions? Auctions embedded in your phone? There was some vague talk about China, but it amounted to "lots of people use Skype in China," and didn't get much further than that. Just a couple years later, eBay was already writing off
the supposed synergies and then gave up looking for
the synergies altogether. Not so long ago, it spun the company out, and there were plans for an IPO.
Just a few days ago, there were rumors that both Facebook and Google were considering buying Skype
at around $3 or $4 billion. In both cases, you could make out some potential synergies. Facebook has become a huge communications platform, and adding more voice capabilities could be compelling. Google, obviously, has Google Voice and owns Skype-clone Gizmo.
However, at the last minute, it appears that Microsoft swooped in and more than doubled the asking price
, paying $8.5 billion. And, we're left with deja vu. It seems we're not the only one asking how this makes sense
. It certainly has all the earmarks of a big company with too much cash feeling the need to do something
to be considered relevant, especially after hearing that two of the newer darlings in the tech world were considering the buyout themselves.
Are there synergies here that make sense? Well, certainly more than existed with eBay. But enough to make it worth so much more to Microsoft than Facebook or Google? I can't see it. Also, almost everything I can think of where Microsoft might integrate with Skype would likely make the product more annoying
and less valuable
. And while Skype is definitely a great product -- I use it all the time -- and usage has steadily grown over the years, the company is still having trouble finding profits. $8 billion is a lot to spend on a company that keeps using up the red ink on its income statements.
Perhaps Skype just puts something in the water it serves in conference rooms that makes big tech companies go loopy, increasing how much they're willing to pay and seeing magic synergies where none really exist.